INVESTMENT ADVISORY AGREEMENT
MARQUIS FUNDS
AGREEMENT made this day of November, 1996, by and between
Marquis Funds, a Massachusetts business trust (the "Trust"), and First National
Bank of Commerce in New Orleans, (the "Adviser").
WHEREAS, the Trust is an open-end, management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), consisting of several series of shares, each having its own investment
policies; and
WHEREAS, the Trust has retained SEI Financial Management Corporation
(the "Administrator") to provide administration of the Trust's operations,
subject to the supervision of the Board of Trustees;
WHEREAS, the Trust has retained the Adviser to render investment
management services with respect to certain of its portfolios, but wishes this
agreement to govern the provision by the Adviser of services to its Investment
Grade Income Fund, Small Cap Equity Fund, and International Equity Fund and such
other portfolios as the Trust and the Adviser may agree upon from time to time
and listed on Schedule A (the "Portfolios"), and the Adviser is willing to
render such services;
WHEREAS, the Adviser is authorized to invest the assets of the Small
Cap Equity Fund or International Equity Fund in another registered investment
company ("Master Fund") or manage the assets directly as it deems appropriate
after consultation with the Trust's Board of Trustees; and
WHEREAS, the Adviser, with the approval of the Board of Trustees, may
appoint one or more sub-advisers for the Portfolios.
NOW, THEREFORE, in consideration of mutual covenants herein contained,
the parties hereto agree as follows:
1. Duties of the Adviser. The Trust employs the Adviser to manage
the investment and reinvestment of the assets, to supervise and
monitor the investment activities of any sub-advisers appointed by the
Advisor and approved by the Board of Trustees and each affected
Portfolio's shareholders, to supervise and monitor the investment
activities of any Master Fund in which the assets of any Portfolio are
invested, and to continuously review, supervise, and administer the
investment program of the Portfolios, to determine in its discretion
the securities to be purchased or sold, to provide the Administrator
and the Trust with records concerning the Adviser's activities which
the Trust is required to maintain, and to render regular reports to
the Administrator and to the Trust's Officers and Trustees concerning
the Adviser's discharge of the foregoing responsibilities. The Adviser
shall discharge the foregoing responsibilities subject to the control
of the Board of
Trustees of the Trust and in compliance with such policies as the
Trustees may from time to time establish, and in compliance with the
objectives, policies, and limitations for each such Portfolio set
forth in the Trust's prospectus and statement of additional
information as amended from time to time, and applicable laws and
regulations.
The Adviser accepts such employment and agrees, at its own expense, to
render the services and to provide the office space, furnishings and
equipment and the personnel required by it to perform the services on
the terms and for the compensation provided herein.
2. Portfolio Transactions. The Adviser is authorized to select the
brokers or dealers that will execute the purchases and sales of
portfolio securities for the Portfolios and is directed to use its
best efforts to obtain the best net results as described in the
Trust's prospectus and statement of additional information from time
to time. The Adviser will promptly communicate to the Administrator
and to the officers and the Trustees of the Trust such information
relating to portfolio transactions as they may reasonably request.
It is understood that the Adviser will not be deemed to have acted
unlawfully, or to have breached a fiduciary duty to the Trust or be in
breach of any obligation owing to the Trust under this Agreement, or
otherwise, solely by reason of its having directed a securities
transaction on behalf of the Trust to a broker-dealer in compliance
with the provisions of Section 28(e) of the Securities Exchange Act of
1934, as amended.
3. Subject to the approval of the Trust's Board of Trustees, including a
majority of the disinterested trustees of the Trust, the Adviser may
invest all or substantially all of the assets of a Portfolio in shares
of a Master Fund, or may retain one or more sub-advisers to perform
any or all of the services and assume any of the responsibilities
described in Sections 1 and 2 of this Agreement. The investment of a
Portfolio's assets in shares of a Master Fund shall not relieve the
Adviser of its responsibilities under this Agreement to supervise and
monitor the investment activities of the Portfolio, further, the
retention of a sub-adviser by the Adviser shall not relieve the
Adviser of its responsibilities under this Agreement to supervise and
monitor the investment activities of any such sub-adviser.
4. Compensation of the Adviser. For the services to be rendered by the
Adviser as provided in Sections 1 and 2 of this Agreement, the Trust
shall pay to the Adviser compensation at the rate specified in the
Schedule(s) which are attached hereto and made a part of this
Agreement. Such compensation shall be paid to the Adviser at the end
of each month, and calculated by applying a daily rate, based on the
annual percentage rates as specified in the attached Schedule(s), to
the assets. The fee shall be based on the average daily net assets
for the month involved.
All rights of compensation under this Agreement for services performed
as of the termination date shall survive the termination of this
Agreement.
5. Other Expenses. The Adviser shall pay all compensation, if any, of
officers or trustees of the Trust who are affiliated persons of the
Adviser or any affiliated corporation of the Adviser, all expenses of
preparing (including typesetting), printing and mailing reports,
prospectuses, statements of additional information, and sales
literature to prospective clients to the extent these expenses are not
borne by the Trust under a distribution plan adopted pursuant to Rule
12b-1.
6. Excess Expenses. If the expenses for any Portfolio for any fiscal
year (including fees and other amounts payable to the Adviser, but
excluding interest, taxes, brokerage costs, litigation, and other
extraordinary costs) as calculated every business day would exceed the
expense limitations imposed on investment companies by any applicable
statute or regulatory authority of any jurisdiction in which Shares
are qualified for offer and sale, the Adviser shall bear such excess
cost.
However, the Adviser will not bear expenses of the Trust or any
Portfolio which would result in the a Portfolio's inability to
qualify as a regulated investment company under provisions of the
Internal Revenue Code. Payment of expenses by the Adviser pursuant to
this Section 6 shall be settled on a monthly basis (subject to fiscal
year end reconciliation) by a reduction in the fee payable to the
Adviser for such month pursuant to Section 4 and, if such reduction
shall be insufficient to offset such expenses, by reimbursing the
Trust.
7. Reports. The Trust and the Adviser agree to furnish to each other, if
applicable, current prospectuses, proxy statements, reports to
shareholders, certified copies of financial statements, and such other
information with regard to their affairs as each may reasonably
request.
8. Status of the Adviser. The services of the Adviser to the Portfolios
are not to be deemed exclusive, and the Adviser shall be free to
render similar services to others so long as its services to the
Portfolios are not impaired thereby. The Adviser shall be deemed to
be an independent contractor and shall, unless otherwise expressly
provided or authorized, have no authority to act for or represent the
Trust in any way or otherwise be deemed an agent of the Trust.
9. Certain Records. Any records required to be maintained and preserved
pursuant to the provisions of Rule 31a-1 and Rule 31a-2 promulgated
under the 1940 Act which are prepared or maintained by the Adviser on
behalf of the Trust are the property of the Trust and will be
surrendered promptly to the Trust on request.
Limitation of Liability of the Adviser. The duties of the Adviser
shall be confined to those expressly set forth herein, and no implied
duties are assumed by or may be
asserted against the Adviser hereunder. The Adviser shall not be liable
for any error of judgment or mistake of law or for any loss arising out
of any investment or for any act or omission in carrying out its duties
hereunder, except a loss resulting from willful misfeasance, bad faith
or gross negligence in the performance of its duties or the duties of
any sub-advisers, or by reason of reckless disregard of its or any sub-
adviser's obligations and duties hereunder , except as may otherwise be
provided under provisions of applicable state law which cannot be waived
or modified hereby. (As used in this Paragraph 9, the term "Adviser"
shall include directors, officers, employees and other corporate agents
of the Adviser as well as that corporation itself).
So long as the Adviser acts in good faith and with due diligence and
without gross negligence or willful misconduct, the Trust assumes full
responsibility and agrees to and hereby does indemnify the Adviser and
hold it harmless from and against any and all actions, suits and
claims, whether groundless or otherwise, and from and against any and
all losses, damages, costs, charges, reasonable counsel fees and
disbursements, payments, expenses and liabilities (including
reasonable investigation expenses) arising directly or indirectly out
of said advisory relationship to the Trust or any other service
rendered to the Trust hereunder. The indemnity and defense provisions
set forth herein shall indefinitely survive the termination of this
Agreement.
The Adviser's rights hereunder shall include the right to reasonable
advances of defense expenses in the event of any pending or threatened
litigation with respect to which indemnification hereunder may
ultimately be merited if a majority of the disinterested Trustees or
independent legal counsel determines that there is a reasonable belief
that indemnification ultimately will be permissible. However, if it
is ultimately determined that the Adviser is not entitled to
indemnification, all funds advanced must be returned to the Trust.
In order that the indemnification provision contained herein shall
apply, however, it is understood that if in any case the Trust may be
asked to indemnify or hold the Adviser harmless, a determination must
be made either by a vote of a majority of the disinterested Trustees
or by opinion of independent legal counsel that indemnification is
available. In addition, the Trust shall be fully and promptly advised
of all pertinent facts concerning the situation in question, and it is
further understood that the Adviser will use all reasonable care to
identify and notify the Trust promptly concerning any situation which
presents or appears likely to present the probability of such a claim
for indemnification against the Trust, but failure to do so in good
faith shall not affect the Adviser's rights hereunder.
11. Permissible Interests. Trustees, agents, and shareholders of the
Trust are or may be interested in the Adviser (or any successor
thereof) as directors, partners, officers, or shareholders, or
otherwise; directors, partners, officers, agents, and shareholders of
the Adviser are or may be interested in the Trust as Trustees,
shareholders or otherwise; and the Adviser (or any successor) is or
may be interested in the Trust as a shareholder or otherwise. In
addition, brokerage transactions for the Trust may be effected through
affiliates of the Adviser or any sub-adviser, subject to the rules
and regulations of the Securities and Exchange Commission.
12. Duration and Termination. This Agreement, unless sooner terminated as
provided herein, shall remain in effect until two years from date of
execution, and thereafter, for periods of one year so long as such
continuance thereafter is specifically approved at least annually (a)
by the vote of a majority of those Trustees of the Trust who are not
parties to this Agreement or interested persons of any such party,
cast in person at a meeting called for the purpose of voting on such
approval, and (b) by the Trustees of the Trust or by vote of a
majority of the outstanding voting securities of each Portfolio;
provided, however, that if the shareholders of any Portfolio fail to
approve the Agreement as provided herein, the Adviser may continue to
serve hereunder in the manner and to the extent permitted by the 1940
Act and rules and regulations thereunder. The foregoing requirement
that continuance of this Agreement be "specifically approved at least
annually" shall be construed in a manner consistent with the 1940 Act
and the rules and regulations thereunder.
This Agreement may be terminated as to any Portfolio at any time,
without the payment of any penalty, by vote of a majority of the
Trustees of the Trust or by vote of a majority of the outstanding
voting securities of the Portfolio on 60 days written notice to the
Adviser, or by the Adviser at any time without the payment of any
penalty, on 90 days written notice to the Trust. This Agreement will
automatically and immediately terminate in the event of its
assignment.
As used in this Section 12, the terms "assignment", "interested
persons", and a "vote of a majority of the outstanding voting
securities" shall have the respective meanings set forth in the 1940
Act and the rules and regulations thereunder; subject to such
exemptions as may be granted by the Securities and Exchange Commission
under said Act.
13. Notice. Any notice required or permitted to be given by either party
to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice
to the other party at the last address furnished by the other party to
the party giving notice: if to the Trust, at 000 Xxxx Xxxxxxxxxx
Xxxx, Xxxxx, Xxxxxxxxxxxx 00000, and if to the Adviser at 000 Xxxxxxx
Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxx 00000.
14. Severability. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
A copy of the Agreement and Declaration of Trust of the Trust is on file with
the Secretary of The Commonwealth of Massachusetts, and notice is hereby given
that this instrument is executed on behalf of the Trustees of the Trust as
Trustees, and are not binding upon any of the Trustees, officers, or
shareholders of the Trust individually but binding only upon the assets and
property of the Trust.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as of the day and year first written above.
Marquis Funds First National Bank of Commerce in
New Orleans
By: By:
Attest: Attest:
Schedule A
to the
Investment Advisory Agreement
between
Marquis Funds
and
First National Bank of Commerce in New Orleans
Dated: November , 1996
Pursuant to Section 4, the Trust shall pay the Adviser compensation for
advisory services rendered to the following Portfolios at an annual rate as
follows:
During any term of this Agreement while the Portfolio's "investment securities"
are 100% invested in a Master Fund:
Portfolio Fee
--------- ---
Small Cap Equity Fund 40 bps
International Equity Fund 40 bps
During any term of this Agreement while the Portfolio's assets are managed by
the Adviser (either directly or through a sub-adviser):
Portfolio Fee
--------- ---
Investment Grade Income Fund 74 bps
Small Cap Equity Fund 90 bps
International Equity Fund 110 bps
